The Federal Labor Government has introduced new legislation that will change the current environment and affect businesses in the way they engage and employ their employees.
The Secure Jobs, Better Pay Act was introduced by the Labor Government to hand the power directly back to unions and allow unions to force multi-enterprise bargaining.
Multi-enterprise bargaining has always been present in the Fair Work Act 2009 (Cth); this new legislation has opened it up to allow unions to force employers into these agreements as opposed to the current legislation which requires agreement between parties. The new legislation has been introduced to target sectors that traditionally have low enterprise agreement and union coverage.
This new legislation provides the Fair Work Commission (FWC) greater powers to arbitrate disputes, including where a union wishes to combine a collective of similar interest employers, for example, Childcare, Aged Care, Retail or Hospitality, to be covered by an enterprise agreement instead of their local contracts.
Critically, this removes the power the employer and the employees have in deciding their own conditions, it removes flexibility.
As an example, a childcare centre which currently has individual contracts with each of their employees that are based off the Award, a union may introduce a single interest agreement into the childcare industry and seek to have it apply to a group of childcare centres, even if they are not interested in it.
This will remove the ability of a business to engage with their employees in agreed arrangements, it removes all flexibility and centralises control of employment conditions to parties that have nothing to do with the business or employment.
Essentially and critically, it will prevent agreements at a business or local level and prevent a business from rewarding employees for performance, as it will discourage employees showing initiative and increasing productivity.
While there are other key changes, by far the largest concerns for employers who currently have their own arrangements in place, is that they may get drawn into a sector or industry wide agreement, even if they do not want to.
If you are an employer who already has an enterprise agreement in place, there are still changes that may affect you. Changes such as the issuing of NERR no longer required for replacement agreements and a reduction in opportunities to resist bargaining for a new agreement, are now some of the other key changes.
We would expect to see more disputes and pressure being placed on employers to bargain and if they have an expired agreement in place, it is likely we will see disputes regarding bargaining orders increasing.
We are expecting to see employers in certain industries targeted, specifically industries who pay at or close to Award conditions, have low levels of union interference or membership and have expired enterprise agreements, we believe these are the employers at an increased risk of being included in multi-enterprise bargaining.
These changes are expected to commence around June 2023.
Our advice for employers who have an enterprise agreement which has passed its nominal expiry date, is to consider if it would be worth negotiating a replacement agreement before the significant changes to bargaining commence in mid-2023.
Our advice for employers without a current agreement is to seek advice as to the likely affects these changes may have on their business and or reach out for advice if they are already seeing an increase in union activity and or have received notification of an intention to bargain.
If you would like to discuss these changes or have general questions regarding employment law, please do not hesitate to contact us.
Salt Legal is an Employment Law Firm based in Melbourne. We provide legal advice and representation to businesses across all sectors and industries in all areas of employment law, OHS and workers compensation.
Brett Pomroy
Principal Lawyer
Salt Legal